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Video: Lew: Leaders agree ‘we can’t push to a default’

Transcript of: Lew: Leaders agree ‘we can’t push to a default’

PRES. OBAMA:I've put things on the table that are important to me and to
Democrats
, and I expect Republican leaders to do the same.

MR. GREGORY:As deliberations continue, there were no face-to-face talks this weekend, and
House
Republicans are expected to vote Tuesday on a series of measures to cut spending and balance the budget, although they don't appear to have the votes necessary for those measures to become law. Joining me now, the president's top budget adviser
Jack Lew
. Welcome to
MEET THE PRESS
.

MR. JACK LEW:Good to be here,
David
.

MR. GREGORY:Good to have you here. So what is the latest? Have there been substantive talks over the course of the weekend?

MR. LEW:Well, the latest is that, after the meeting on Thursday, there've been a lot of conversations within each of the party caucuses, within the
House
and the
Senate
, phone calls and conversations back and forth. That's how the president left it on Thursday, that we'd kind of put all of the items on the table. It was now a question of
Congress
figuring out what it could do. So I think that will continue over the next day or so.

MR. GREGORY:But you don't have, as we sit here now, a, a better sense of what
Congress
is willing and able to do.

MR. LEW:I think that what is encouraging is that the leaders in
Congress
seem to all agree that we can't push to a default, that we need to have a path that makes sure that the
United States
can keep its obligations and pay its bills in August. So I think that there are many conversations going on in order to make sure that that doesn't happen.

MR. GREGORY:Well, let me be clear. Is the president's position that he would accept no more than $1 trillion in cuts if there's no tax increases? Is that the number that he's sort of dealing with in his head?

MR. LEW:I, I think, I think it's a little less mechanical than that. The president made clear he wants the largest deal possible. He wants to do the most we can to reduce the deficit. That would be the right thing to do for the
American people
. He made it clear he's willing to go into areas that he's not in the past been comfortable going into, and others will have to do that as well.

MR. GREGORY:But he used that figure.

MR. LEW:But he also said that if we can't get the most done, then in addition to extending the debt we should do as much as we can. There are a number of ways to get there. We aspire to, we aspire to more than -- yeah.

MR. GREGORY:But -- sure, but, but my question is the number. A -- if you get beyond $1 trillion and he still can't get any tax increases, the president said, "I'm not willing to sign something that, that cuts more spending without having tax increases."

MR. LEW:Well, what, what, what the president said was to do major structural changes on the spending side, there would have to be tax increases.
And I
think that one can see a path to getting well over $1 trillion on things that we should be able to agree to.

MR. GREGORY:Hm. So if that's something of a fallback plan, because the president wanted something on the order of $4 trillion over 10 years of spending cuts,
Erskine Bowles
told my colleague
Chuck Todd
on his program, "The Daily Rundown," that that might fall well short of what's necessary here. This is what he said.

MR. ERSKINE BOWLES:The problem is,
Chuck
, that so many people are talking about doing it with just about $2 trillion of deficit reduction. That's not a solution. That's not going to fool our creditors.

MR. GREGORY:In other words, the markets, our creditors are going to look at that and say that's not a fallback position, that's well short of what the
United States
should be doing.

MR. LEW:I think if you look at what the markets are saying, they're saying two things. They're first saying the
United States
cannot default.
And I
think that is the bare minimum.
And I
say that again only because it has to be clear that there's some extreme views in some places that think that that's something we can do. We can't. The second is we need to get our fiscal
house
in order. I think that we've said for some time now, as have most, that we need to do on the order of $4 trillion of deficit reduction over the next 10, 12 years. We would like to get that done now. If that can't happen, if there's not a willingness to come together, the president has shown he's willing to make the kinds of, of moves that are necessary to get there. But if there's not a similar willingness, we should do as much as we can now. I think that the markets will understand moving far -- as far as we can. What will be hard to explain is doing nothing.

MR. GREGORY:You talk about the perils of default -- as has the, the Fed chief and the president and others -- as a given. And yet look at the polling on this, even among people who are paying close attention in the
Gallup poll
, 53 percent are in favor of voting against raising the debt ceiling. Do you think that's because there are
Republicans
like
Michele Bachmann
and others saying that this administration is really selling, in her words, a "misnomer" that, that we're headed toward default? Where does that come from? Do you think they actually believe that, or you think they're doing that cynically?

MR. LEW:I can't explain what motivates people to say, say those things. I can tell you the facts are the facts. If we don't raise the debt ceiling, we won't be able to pay our bills in August. And that has dire consequences. It will,
for the first time
, mean the
United States
cannot keep its obligations. It will cascade through the economy. It will mean that people,
regular people
who are buying homes and, and, and cars will pay higher interest rates. It means that we will put a cloud over the
United States
that might not go away anytime soon.